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Published on April 13, 2008

Author: Belly

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The Japanese consumer market:  The Japanese consumer market Mariko Fujiwara Hakuhodo, Inc., Tokyo Japan Demographics:  Demographics Slide3:  Urbanized population HAKUHODO Average life expectancies grew significantly:  Average life expectancies grew significantly Fastest aging population in the world today:  Fastest aging population in the world today Female Male The very old dominate the senior population:  The very old dominate the senior population Slide7:  Fertility rates dropping rapidly Labor force will continue to decrease in size :  Labor force will continue to decrease in size Labor force Labor force 10,000 Japanese population pyramid 1950-2050:  Japanese population pyramid 1950-2050 Japanese households decreasing rapidly in size :  Japanese households decreasing rapidly in size Nr. of persons per household Nr. of households 1980 1975 1985 1995 1990 2005 2000 (thousands) More couples live by themselves and more alone:  More couples live by themselves and more alone Couples Couple with children One parent with children Other families Single person household Non family 2000 1995 1990 1985 Nuclear families Families Most significant demographic facts are::  Most significant demographic facts are: Fastest aging society in the world Fertility rate continues to drop very fast Total population began decreasing in 2005 The population is highly urbanized Live in smaller families More live as couples or alone How they translate into consumer behavior?:  How they translate into consumer behavior? They are not interested in large quantities They need smaller/ individual portions They can exercise discretion easily They can focus on what they really want and forego others because nobody suffers They can afford more expensive things Japanese families:  Japanese families Marriage and divorce per 1,000:  Marriage and divorce per 1,000 Marriage Divorce Younger generations are marrying later:  Younger generations are marrying later First marriages Husband Wife First marriage Age differences Marriage and starting a family :  Marriage and starting a family Fewer marriages Marrying later Waiting longer to start a family Having fewer children More having no children More divorces More remarriages Greater variety of families:  Greater variety of families Half of them have members 2 or less Parents and two children not so typical any more Single-person households grow fastest Husband and wife (couples by themselves) One-parent and children less Other The rest in special care facilities Japanese women:  Japanese women Japanese women receiving increasingly more education 1954-2005:  Japanese women receiving increasingly more education 1954-2005 Male Female Lifecycle of Japanese women today:  Lifecycle of Japanese women today Care for the elderly members of the family Slide23:  Women in the workforce by age group China Pakistan India Malaysia Japan Korea Hong Kong Asia Asia Sweden USA Italy Czech Holland Europe France Slide24:  Japanese women by occupation, role and experiences 1986-2005 Traveled abroad Manufacturing Gov’t committee Medical doctor Upper House Researchers Lower House Section chief All employee School teachers Total Population More Japanese now work part time:  More Japanese now work part time Part time worker/ all workers in Japanese workforce % Signs of recovery?:  Signs of recovery? More companies report profit More companies began higher many more new recruits The prices of property has begun recovering Consumers replacing their old appliances with more new ones sooner Some suffer from negative equity while the first time buyers enjoy relatively affordable housing costs Slide28:  Consumer durables 1955-2006 Refrigerator Washer Vacuum Cleaner Color TV Cars Microwave oven VTR PC DVD P/R Mobile phone Digital camera Air conditioner Consumers have begun replacing old with new:  Consumers have begun replacing old with new Average interval Japanese consumers replace their appliances with Color TV Refrigerator Washer Air conditioner Market regains consumer confidence? :  Market regains consumer confidence? Discretionary income Household expenditure Yen Internet access by age group:  Internet access by age group New and altered behavior :  New and altered behavior ICT and e-Commerce or m-Commerce ICT and info-communication industries altered the lifestyle of Japanese consumers ICT empowered consumers with voice ICT allowed consumers to actively shape the market Consumer values and preferences:  Consumer values and preferences Slide34:  Areas of consumption Japanese wish to focus /improve Leisure and hobby Clothes Durable goods Housing Food and Diet Recent experiences for the Japanese “Seikatsusha” :  Recent experiences for the Japanese “Seikatsusha” Prolonged recession has forced Japanese “Seikatsusha” to reexamine their consumer behavior We saw negative growth in some years, and the record high unemployment rates in post WWII deprived the younger workers of good jobs Changes in “Japanese” employment pattern and salary structure had an impact on consumer confidence Some suffer from negative equity Slide36:  “Mosaic” Consumption Two orientations coexist in consumer behavior 1.Preference for the real thing “It’s worth spending more money to get something good” 2.Preference for lower prices “Would like to pay less for things that they’re not so particular about” Source : A publication from Hakuhodo Institute of Life and Living,1997 Slide37:       “Mosaic” Consumption The Reason Behind this Situation... Japanese consumers are getting used to an economy that is growing more slowly They’re noticing that…. The economy is growing not so fast as before. Be selective and focused. . Quality of life is important... Promising targets:  Promising targets Women in the Japanese market:  Women in the Japanese market Better educated Highly qualified women enter the workforce An increasing number of young women are working and the wage gap is narrowing for them More women are pursuing careers Women are becoming more visible in well-paid positions and in higher management positions Seniors:  Seniors Today’s Japanese seniors:  Today’s Japanese seniors Young Seniors:  Young Seniors The generation who worked hard to rebuild and modernize the economy. They are the first to have accepted and adopted Western ideas and technology. They have ample time with disposable income and / or sizable savings to enjoy life. They are actively seeking ways to enjoy life for themselves. They try to remain young at heart. They try to remain active and want to look stylish and attractive. The First Postwar Baby Boomers:  The First Postwar Baby Boomers 80% of assets held by individuals in Japan belong to those aged over 50. They are in late 50s now and are well aware that they are getting older. Most of them feel that they are young and capable of competing with their younger colleagues in many areas. The First Postwar Baby Boomers:  The First Postwar Baby Boomers Finally, they are seeking ways to live their lives for themselves. They like to think of themselves as being fashion conscious and fashionably dressed. They have interest in maintaining good health through healthy diet. Japanese seniors today want to serve themselves:  Japanese seniors today want to serve themselves Japanese seniors want a lot of communication:  Japanese seniors want a lot of communication Child Spouse Sibling Grand child Friend Quality of Life Issues:  Quality of Life Issues Good health Sensible diet Focus on healthy lifestyles Interest in sports Participation in sports events Quality of Life Issues:  Quality of Life Issues Quality of Experience Time Value Focus on Leisure Focus on Style Slow and genuine process Slow life Younger generations:  Younger generations The New Breed Generation:  The New Breed Generation Born in ’60s (9.3 million) The first generation to have grown up in the affluence generated by the rapid economic growth after the war. They have an entirely different value system from their parents Martians ~ their attitudes toward life are extremely alien to the older generations The New Breed Generation:  The New Breed Generation First generation to have cultivated a lifestyle that puts emphasis on enjoyment and leisure activities. They want to enjoy freedom.They do not want to look far ahead into the future. They did not have to. They are willing to pay premium prices for information in order to remain well informed and thereby enjoy life. They are the first generation of parents who do not want to give up their preferred lifestyles for the sake of their children. The New Breed Generation:  The New Breed Generation “Life is to be enjoyed” Strong sense of “entitlement” “I am important”, “ and therefore I deserve a lot” “I do not want to give up anything” The society and the environment “must accommodate us” The Second Postwar BabyBoomers:  The Second Postwar BabyBoomers Born in early ’70s (8.1 million) The first generation born into a predominantly middle-class environment. They assume that everybody lives in much the same way as they do. The Second Postwar Baby Boomers:  The Second Postwar Baby Boomers They also believe life is to be enjoyed and assume a “let it be” attitude. They are self-conscious and protective of privacy in their lives. They want to be well informed but they tend to reject anything that has the power of authority. They have strong desire to try new things and explore the unknown in trying to establish their “personal style”. The Second Postwar Baby Boomers:  The Second Postwar Baby Boomers “Make life just as I want but do not lecture me” Today’s Young Recruits:  Today’s Young Recruits Born in the early ’80s. (7.3 million) Growing up when the population of young people began to decline significantly. Water Spiders Today’s Young Recruits:  Today’s Young Recruits They are perceptive and discerning. They are quite realistic and practical. They are more tolerant and more accepting of other people’s values and standards. They are open to people from a wide variety of cultures and backgrounds. They are quite sociable and outgoing. They are quick to adapt new trends and high-tech innovations. Today’s Young Recruits:  Today’s Young Recruits “ Live and let be”

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